Help! Should i get a loan and condense debt?

ClaireF72

Hi

Myself and my husband currently have a total of just under £11000 worth of debt. This is spread over a loan and an account in its overdraft (in my husbands name) and 4 credit cards in my name.

3 of the 4 credit cards are either no or very low interest and because the loan asn't paid as per the agreement we are paying interest.

Making minimum repayments every month we are paying out approx. £325 per month. But at the same time we are incurring approx. £66 in interest every month.

Would it be worth condensing the debt into one loan or are we better off carrying on as we are?

Tixy

From what you have said it sounds like the interest rate you would pay on an loan would be higher than on your cards. Plus you might not be able to get a loan anyway.

Work out an overall APR you are paying on your debts - looks like around 7% from what you have posted.

Consolidation loans are not generally recommended on this website. They often don't help people address their debt issues and the reason they are in debt.

Are you just paying minimum payments on the credit cards? what about the overdraft? are you managing to reduce it each month?

If you are struggling to repay your debts before you even consider applying for more credit then it might help if you post up a statement of affairs http://www.makesenseofcards.com/soacalc.html to show your current position and to see what people can recommend to help you clear the debts quicker.

gonzo127

hi well the general rule of thumb is to not consolidate, this is because generally this does not address the issue for the debt in the first place and it is all to easy to 'just get that on the card/credit' since my repayments are lower, this just lead to more debt - and this is not directed at you but in the vast majority of people who are on these boards who also felt they could control their spending if they just consolidated once - myself included

best thing to do is post up your statement of affairs so we can help you go through it and point out the areas where you could make a saving with litte or no effort in some case's

another reason to not consolidate is that as you have pointed out a large amount of your debt is costing you 0% in interest, if you consolidate all this you will end up paying interest on it probably in the region of 8-12% and added to this a much longer repayment term meaning even more money paid out in interest

Fortheloveofmoney

I would agree with the above posters. Consolidation is how I managed to get myself in to 30K worth of debt.

ClaireF72

Thanks everyone. I didn't think I should consolidate but wanted reassurance.

ClaireF72

Hi Tixy

At the minute we are just paying minimum repayments with regards the credit cards and approx. £20 per month off the overdraft, as I am on maternity leave. With regards my credit cards I have a Natwest Visa (1.527% interest), Virgin credit card (0.0788% interest till Jan '11), Halifax credit card (0% till Sept '10) and a Natwest Platinum Mastercard (0% till Apr '11).

RAS

Hi

I suspect those APRs for natwest and Virgin are per month?

What does the halifax revert to in September?

ClaireF72

The Halifax card reverts to 21.95% p.a. (variable) as of 2/9/10. I'm not actually using this card anymore as I only used it for a balance transfer.